When the stock reaches a point in trading where technical indicators suggest the next price move of the stock will be down. When a stock's price has risen too far, too fast and it is beginning to look expensive to investors, it is overbought. It's not to say it won't reach you price target, but there's always a pull back before the next move to HIGHER HIGHS. Also, with market makers manipulation and shorting, you hope others won't fear, panic and create a big sell off as have seen so many times.
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